Amortization and depreciation are non-cash expenses on a company's income statement. Depreciation represents the cost of capital assets on the balance sheet being used over time, and amortization ...

Reviewed by Charlene Rhinehart Fact checked by Vikki Velasquez Businesses depreciate long-term assets for both tax and accounting purposes. For tax purposes, businesses can deduct the cost of the ...

Learn how businesses use depreciation to manage asset costs over time. Explore various methods like straight-line and double-declining balance with examples.

Depreciation is an accounting method that spreads the cost of an asset over its expected useful life.

Learn how to calculate asset depreciation and amortization using the straight-line basis method. Discover its advantages, ...

Record depreciation. Record this annually on the income statement and update the accumulated depreciation on the balance sheet. Depreciation is more than an accounting tool.

Variable-declining balance uses the double-declining factor but also initiates the automatic switch to straight-line depreciation once that is greater than double-declining.

The adjustments will typically affect both income-statement and balance-sheet accounts. For instance, depreciation is often recognized faster for tax purposes than it is for book purposes.

Invested capital typically refers to a combination of shareholders' equity and long-term debt, both of which can be found on the balance sheet. Shareholders' equity is generally the last item ...